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Shanghai Shares Seen To Extend Gains |
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Thursday, 01 November 2007 06:00 |
10/31/2007 8:28:40 PM The Chinese stock market has finished in positive territory for four straight sessions, and analysts are calling for the Shanghai Composite Index to add to its totals on the heels of the U.S. Federal Reserve's decision to cut interest rates by 25 basis points.
The Shanghai Composite Index closed higher again on Wednesday, riding increased cash flow following the conclusion of oil producer PetroChina's massive IPO as property stocks led the charge.
For the day, the index added 57.57 points or 098 percent to close at 5,954.77 with a turnover of 119.46 billion yuan. The market's gains slowed after rising 5.2 percent over the last two days as the index encountered strong resistance at 6,000 points.
Among the gainers, Bank of Communications rose on strong quarterly earnings, while China Vanke Co Ltd, Poly Real Estate Group Co Ltd, Air China Ltd and China Eastern Airlines Corp Ltd also finished higher.
Bank of China Ltd slid on profit-taking after gains on strong quarterly earnings earlier this week.
Wall Street provides a healthy dose of positive momentum, soaring after the announcement of the Fed's rate cut. There was some downward movement after the announcement as the Fed made some comments indicating that it is not likely to lower rates again in the near future.
Nonetheless, the rebound by stocks lifted the major averages to new highs for the session. The major averages ended the session off their best levels of the day, but they held onto strong gains.
The Dow ended the session with a triple-digit gain, closing up 137.54 or 1 percent at 13,930.01. The tech-heavy Nasdaq closed up 42.41 or 1.5 percent at a six-year closing high of 2,859.12, while the S&P 500 closed up 18.36 or 1.2 percent at 1,549.38.
In economic news, China lifted domestic gasoline and diesel prices by a tenth on Thursday, the first increase in 17 months. The move will give Sinopec a break. Asia's top refiner has endured mounting losses in recent weeks by being forced to sell fuel at sub-market but mandated government rates.
Also, China's steel output is expected to rise to nearly one billion tons per year by as early as 2015, studies have shown. China - already the world's largest steel producer - is on course to turn out 480 million tons of steel in 2007. The country could easily double that mark within eight years, and China is also expected to import more than 800 million tons of iron ore by 2015.
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